Realtor Fees and Commissions

Real estate commissions represent the fee paid to licensed professionals for their services in a property transaction. Typically, the seller pays the commission, which the listing brokerage then shares with the buyer's brokerage. This fee covers the costs of marketing the home, negotiating contracts, and managing legal requirements.

Commission rates are not fixed by law. Fees vary depending on the level of service and the specific brokerage agreement. Most agreements use a percentage of the final sale price, though some professionals offer flat-fee structures. Under the Trust in Real Estate Services Act (TRESA), agents must provide clear, written disclosure of these fees before you sign a representation agreement.

When you sell a home, the total commission usually ranges between 3% and 5%, plus HST. This amount is deducted from the sale proceeds upon closing. For example, if a home in Dufferin County sells for $800,000, a 5% commission totals $40,000. This fee is often split equally between the listing agent and the agent who brings the buyer.

Buyers should understand that while the seller often pays the commission, the buyer’s representation agreement outlines the compensation for their agent. If a seller offers a lower commission than what you agreed to pay your agent, you may be responsible for the difference. Always review these terms with your realtor to ensure financial transparency.